Vikings stadium: E-pulltabs may get marketing boost to help lagging revenue

A basket containing electronic pulltab devices sits behind the bar at O'Gara's Bar and Grill in St. Paul in September 2012. (Pioneer Press file photo: John Autey)

With revenues from electronic charitable gambling lagging, Minnesota Gov. Mark Dayton's staff is working with the charities to beef up marketing to boost the games' popularity.

The games are the revenue source for the state's portion of the new Vikings stadium, and calls continued Friday, April 5, at the Capitol to find a reliable alternative.

Dayton's chief of staff, Tina Smith, met with representatives from Allied Charities of Minnesota, state officials and lawmakers involved in stadium financing and oversight.

Al Lund, executive director of Allied Charities, which represents charitable gaming groups, said the push is to persuade more charities and bars to adopt the newly authorized electronic forms of pull-tabs and bingo and, once they're installed in enough places, to persuade the public to go out and play them.

No dollar figure was discussed for how much would be spent on the effort, Lund said.

The plan is for the charities to fund the marketing efforts in partnership with other stakeholders in the process, Lund said, such as game manufacturers.

He said Smith invited suggestions and that the charities raised the possibility of taking a portion of the money they pay the state to finance regulation efforts and diverting that toward marketing.

Dayton spokesman Bob Hume said the governor is collecting ideas and is not endorsing anything in particular.

He said Dayton remains confident in the financing scheme, which counts on additional tax revenues from new, electronic forms of charitable games to support $348 million in borrowing for the stadium.

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The current conversations are to make sure the financing set-up has every chance to succeed before alternatives are considered, Hume said.

Another meeting with officials from the Minnesota State Lottery, which could play a role as a backup stadium funding source, is scheduled for next week.

While the Democratic governor is calling for patience, Republican House Minority Leader Kurt Daudt of Crown said Friday that the stadium-finance issue must be resolved before the legislative session ends next month.

"If we don't do something, the general fund is going to pay the debt service on these bonds," Daudt said. "I've heard the Democrats say that they think we can wait until next session to deal with this. Frankly, that's after we've incurred all this debt, so I think the taxpayers deserve an answer this session."

Said Lakeville Republican Sen. Dave Thompson: "We've now built this up to the point where Minnesotans are expecting their Vikings stadium and all of a sudden the revenue is not there, and I hope this governor is willing to sit down and figure out how to get it."

The state initially projected the new electronic devices would be installed in 2,500 bars. By the middle of last month, they were in fewer than 200.

And the estimates called for $35 million in taxes for the stadium project in 2013 from the addition of the new e-games. That projection was downgraded to $17 million in November and then to $1.7 million last month. The current revenue estimate for 2014 is $23.3 million.

Lund said he understood from officials at Friday's meeting that it might only take $20 million to satisfy the bond payments in the first year, 2014, substantially less than the $34 million figure that's been mentioned for annual stadium debt service.

"We certainly think we're going to be able to make a big dent on that. Whether we can meet that number or not, time will tell," Lund said.

Officials at the Department of Revenue and Minnesota Management and Budget declined to confirm the $20 million number, saying they can't estimate the size of the debt service obligation until after the bonds are sold, which is scheduled to be in August.

Lawmakers in both parties have called for swift action on the stadium funding issue.

Republican state Sen. Sean Nienow of Cambridge said Thursday that he will introduce a bill to delay the sale of bonds for the stadium until a revenue stream to pay them off is secured.

Rep. Jim Davnie, DFL-Minneapolis, has said lawmakers must have strong assurances before the end of session that there will be sufficient money to pay the bonds, and that the bond sale -- along with the planned fall stadium groundbreaking -- may need to be put off.

House Speaker Paul Thissen, DFL-Minneapolis, said Friday that he sees no reason at the moment to delay the bond sale.

Hume said there is no chance the state's general fund will be tapped for stadium payments.

He mentioned the two backups in the stadium law -- a suite tax expected to raise about $1 million per year starting in 2017 and a sports-themed state lottery game expected to yield around $2 million -- and said it's also possible the arrangement with the charities could be changed to provide more money for the state. The stadium deal struck last spring allocated some of the revenue to the state and some to the charities.

Hume said it's also possible the fall bond sale could be for a portion of the money required instead of the whole amount.

As for the state lottery backup option, director Ed Van Petten said Friday he assumes the stadium law would allow a scratch game as well as perhaps games played on a TV-like screen.

The scratch-type games might be expected to yield $1.5-$4 million per year, Van Petten said, and the electronic offerings maybe around $10 million, but it's difficult to estimate. And not all the money would be available for the stadium, he said, because 40 percent of lottery proceeds are required to go to the state environmental trust fund.

Thissen firmly rejected the idea that the stadium law might authorize the state lottery to get into electronic games.

"I don't think that was ever any part of the discussion, so if there's a question of legislative intent, clearly the legislative intent was not to go into those games," he said.